News

08/09/2016

Ending the shortage: more hotels in the Seaport

The Seaport District could soon get a much-needed block of new hotel rooms.
On Monday, Harbinger Development said it is pushing ahead with plans to put a dual-brand complex with more than 400 rooms on Summer Street, midway between the Boston Convention & Exhibition Center and the cruise ship terminals.
The company, which hopes to start construction next spring, is aiming at a market so tight that rates are at record highs.
Harbinger filed detailed plans with the Boston Redevelopment Authority for a project it’s calling Marine Wharf. It would include a 253-room Hampton Inn and a 166-room Homewood Suites, both in one building, along with street-level storefronts, public open space, and meeting rooms.
The hotels would sit on a 1.2 acres owned by the city at the corner of Summer Street and Drydock Avenue, near the Reserved Channel and close to a variety of big draws.
“It’s a great opportunity,” said Harbinger’s owner, Eamon O’Marah. “We can serve a bunch of different markets: the convention center, the Seaport, the airport, the cruise port.”
The project is welcome news for convention center officials, who say they’re losing business because of a shortage of nearby hotel rooms. A report issued earlier this summer by the Massachusetts Convention Center Authority said the convention center ranks last among Boston’s major competitors on a measure of hotel rooms within walking distance — and is seeing convention bookings decline as a result.
The need is especially sharp for mid-market and extended-stay hotels like Hampton Inn and Homewood Suites, said Pat Moscaritolo, president of the Greater Boston Convention & Visitors Bureau.
“A lot of people are looking for exactly this kind of product,” he said. “As an exhibitor you don’t really need all the extra amenities of the four- and five-star hotels.”
Last fall, the BRA selected Harbinger, which has had a hand in several hotel projects downtown and in the Seaport in recent years, from among four potential developers.
They have been negotiating a 99-year lease for the site and hope to have a deal in place soon, said O’Marah and BRA spokesman Nick Martin.
Final terms have not been hashed out, but Harbinger initially proposed an annual rent to start at $1.5 million and eventually climb to more than $5 million.
The deal is part of a broader push by the BRA to develop land in the Raymond L. Flynn Marine Park.
The BRA would need to approve Harbinger’s plan before work could begin.
Harbinger envisions a 320,000-square-foot building that rises as high as 14 stories as it steps away from the water.
The two hotels — they are both Hilton brands — would share lobbies, meeting space, and a 75-space parking garage on the second floor.
Harbinger hopes to open in 2019, and O’Marah estimates the project will cost $156 million.
Hotel rates in Boston are at record highs, with properties in Boston and Cambridge collecting an average of $254 per room per night, according to Pinnacle Advisory Group, a Boston hotel consulting firm. That’s up 16 percent in the past two years, in part due to tight supply.
There are 1,830 hotel rooms under construction in Boston and Cambridge, according to Pinnacle, with another 3,906 in development. Still, O’Marah said, demand is strong — especially for the sort of mid-market brands his building would offer. He’s confident the project will pay off.
“There is room for more product,” O’Marah said. “You’ve just got to be careful with what you’re building.”